A new study from the Blickstein Group reveals some disturbing trends for law firms that represent businesses, particularly large ones. The Study is entitled Legal Service Delivery in the Age of AI. The Study was done jointly by FTI Technologies, a consulting group, and Blickstein. It looks at law department legal operations.
A Disclaimer: Sort Of
When looking at surveys, it’s always good to know the entities behind them. The questions that are asked and of who can impact the overall results. Both Blickstein and FTI are well-known and respected consulting providers and would not likely deliberately manipulate the questions or results. But it’s good to keep in mind potential unconscious bias when looking at any survey results.
So, Who Are Blickstein and FTI?
According to its website, the Blickstein Group “help[s] leading law firms, tech providers and financial players to serve as change agents for legal service delivery. FTI Technologies’ website says it “provides companies, law firms, private equity firms, and government entities with a comprehensive global portfolio of digital insights and risk management consulting services.”
Both entities have an interest in seeing a change in the legal ecosystem with which they can help companies and law firms.
The Study
The Study is the 17th annual Law Department Legal Operations Survey conducted by Blickstein and FTI. The survey obtained responses from legal operations personnel at some 83 companies. More than 60% of the respondents report directly to in-house counsel. The survey is directed toward the role legal operations play in in-house legal. Still, it has some interesting statistics on how legal operations personnel view law firms and the role AI will play in those relationships. The survey results were published in December 2024.
80% of the respondents think that GenAI will become an “essential part of the legal profession
The Findings
GenAI Use by Legal Ops Personnel
The responses reflect a bullish view of what GenAI can do in the legal marketplace but also demonstrate GenAi has a ways to go:
- Almost 80% of the respondents think that GenAI will become an “essential part of the legal profession.
- 81% believe GenAi will drive improved efficiencies
- Despite this belief, only some 30% have plans to purchase GenAI tools. For 81%, the primary reason for obtaining and using GenAI tools is the efficiencies these tools bring.
- 52% say their GenAI strategy is not as sophisticated as they would like or nonexistent.
The biggest barrier to the use of GenAI among the legal ops professions is cost and security concerns and the lack of skilled personnel available to them.
62% disagreed with the statement that their law firms were innovative
The View of Law Firms
To be blunt, the legal ops people don’t have a very encouraging view of their law firms. When asked about their law firms, here’s what they had to say,
- 62% disagreed with the statement that their law firms were innovative.
- 57% believed their law firms were not leveraging technology to deliver legal services more efficiently and cost effectively.
- 96% want their law firms to approach them more frequently with new legal service delivery models
None of these sound rosy for law firms.
Law Firms and GenAI
The respondents had strong views on what GenAI could do for law firms and what legal ops professionals would like to see:
- 72% think the value of legal services provided by law firms would increase if they used GenAI
- 65% believe wider adoption of GenAI will lower law firm spend
- 78% encourage their law firms to use GenAI
88% believe corporate legal will be the primary driver of innovation and change.
The Future
The respondents clearly (and probably correctly) see that clients must drive innovation and change in the legal sector and, for that matter, by law firms. 88% believe corporate legal will be the primary driver of innovation and change.
In addition, the respondents strongly believe also that GenAI will enable them to do more work in-house that outside counsel is now doing. Some 86% believe GenAI will enable them to bring more work in-house.
When you combine this with the fact that the respondents continue to see law firms increase their rates year after year, you get the feeling that the legal ops people are hungry to upset the traditional law firm-inhouse relationship.
In addition, considering the most significant barrier to more in-house use of GenAi right now is cost (costs will and are coming down), security (security is and will get better), and lack of skill sets (which is and will get better), it’s clear that legal ops professionals expect to be doing more and law firms less in the future.
Legal ops professionals focus on legal service delivery and the business of law rather than the practice of law
But Ya Gotta Wanna
But keep in mind that the survey appears to be of legal ops people. As the Survey Report puts it. “legal ops professionals focus on legal service delivery and the business of law rather than the practice of law.”
Legal ops people are typically more savvy about what technology can do and more focused on what a better legal delivery process might be and do. Whether in-house lawyers who often make the final decisions about GenAI use and the relationships with law firms will follow suit is unclear. In-house lawyers are cut from the same cloth as their law firm brethren which means they are risk adverse and slow to change.
But as legal ops gain a stronger foothold in the in-house legal departments, and GenAI improves, changes may well be on the horizon.